NEW YORK, December 28, 1998 - Castle Harlan Inc., the New York merchant bank, announced today that it had signed a definitive agreement to acquire AMR Services, a subsidiary of AMR Corporation, the parent of American Airlines. The terms were not disclosed. AMR Services had 1997 revenues of $202 million.
AMR Services is one of the world's leading providers of ground services for more than 200 airlines at some 63 major airports in the United States, Canada, the Caribbean, Europe and Asia. They include the three New York area airports, Chi-cago's O'Hare, Orly and Charles DeGaulle in Paris and the new Chek Lap Kok inter-national airport in Hong Kong.
AMR Services counts most of the world's major airlines among its customers. Besides American Airlines, they include United, Delta, KLM, Air France, British Airways, Lufthansa, Korean Air and Singapore Airlines.
The company employs close to 8,000 people worldwide. Revenues this year are expected to top $220 million.
The acquisition is being made by Castle Harlan Partners III, a $630 million limited partnership for private equity investments organized and managed by Castle Harlan. The closing is expected in the first quarter of 1999.
Marcel Fournier, the managing director at Castle Harlan who negotiated the transaction, hailed the excellent reputation AMR Services enjoys in its industry.
"AMR Services is recognized as a provider of the highest quality," he said. "It has a strong and experienced management team and a dedicated workforce. We have great confidence that the company is poised for significant growth."
The services the company provides include passenger check-in and ticketing, passenger boarding, cargo loading and unloading and cargo facilities management, and ramp services such as aircraft arrival and pushback and cabin cleaning. Technical services include maintenance support for aircraft, ground equipment and passenger loading bridges, fueling services and fuel farm management.
Peter A. Pappas, president and CEO of AMR Services, saw the acquisition as an outstanding opportunity for the company and its employees.
"Castle Harlan is known for its success in growing the companies it acquires and adding value to them," he said. "I know we have found a great partner."
Pappas noted that Castle Harlan has previous experience in the aviation indus-try, having owned MAG Aerospace Industries, Inc., the world's leading manufacturer of aircraft sanitation systems and trash compactors, which it sold earlier this year. It also owned Smarte Carte Inc., the world's leading airport baggage cart company, which it sold in 1996.
Castle Harlan Partners III is one of several investment funds totaling more than $1 billion that have been managed by Castle Harlan, Inc., and that represent major corporate and public pension funds, college endowments, foundations and indi-vidual investors. Since Castle Harlan's founding in 1987, the firm has completed ac-quisitions exceeding $3.5 billion.
Castle Harlan's portfolio companies have included Delaware Management Company, a Philadelphia money-management firm with more than $40 billion in assets under manage-ment; Indspec Chemical Corporation, a specialty chemical manufacturer; Ethan Allen Interiors, the furniture company, and Morton's Restaurant Group, owner of Morton's of Chicago, the international chain of steakhouses.
Currently among its portfolio companies are Commemorative Brands, Inc., a leading manufacturer of class rings and other specialty jewelry under the ArtCarved and Balfour brand names, and Statia Terminals Group N.V., one of the world's largest independent marine terminal companies serving the petroleum industry.
It also owns Universal Compression Inc., one of the world's three largest in-dependent providers of natural gas compression equipment and services, primarily to the energy industry.
Castle Harlan was founded by John K. Castle and Leonard M. Harlan, who are chairman and president of the firm, respectively. Castle was a pioneer in institutionalizing private equity investing through limited partnerships and is a former president and chief executive officer of Donaldson, Lufkin & Jenrette, the investment banking firm. Harlan is the, founder and former owner and chairman of The Harlan Company, a diversified real estate and corporate finance advisory firm.
AMR Corporation had said September 29 that it would sell three subsidiaries - AMR Services, AMR Combs and TeleService Resources (TSR) - to increase the focus on its core airline and related technology businesses. It announced the sale of AMR Combs to BBA Group PLC on December 15, and on December 21 announced Platinum Equity Holdings' acquisition of TSR.